1. Field of the Invention
The present invention relates generally to methods and apparatuses for electronic commerce. More specifically, the invention relates to methods and apparatus for extending an account level offer of credit to an applicant based on information about the applicant obtained from one or more credit reports and for obtaining a real time balance transfer from the applicant.
2. Relationship to the Art
With the advent of electronic commerce on the Internet, applicants have begun to expect decisions that have historically required a period of days or weeks to be made instantly when processed on line. Numerous transactions such as purchases of consumer goods, airline tickets, and movie tickets have been adapted for execution on line in a matter of seconds. What has not been perfected is the ability to make a credit decision and grant credit to a party on line in real time. (For the purpose of this specification, "instant" or "real time" credit means within a short period of time within less than about five minutes.) As a result, virtually all Internet commerce to date requires some previously secured method of payment such as a credit card obtained by conventional means or other previously arranged payment source such as a bank account or electronic money.
One factor that has prevented Internet applicants from providing information and receiving instant approval for credit is the difficulty of interfacing with the various credit bureau databases (Equifax, Trans Union, and Experian). Personal information must be entered by a party authorized by the credit bureaus to communicate with the credit bureaus for the purpose of accessing credit bureau reports. Such information must be in exactly the correct form in order for an individual's credit report to be retrieved. Another difficulty has been that the decision to grant credit carries with it significant risk and systems have not been successfully designed that can make a sufficiently reliable underwriting decision using data provided directly by an applicant.
Many credit card issuers provide applications on line that may be filled out by applicants. However, data from those applications must be entered manually into the credit card issuer's system for processing before a credit report is obtained and an underwriting decision can be made. Other applicants may be preapproved by an existing card issuer's system before an offer is made and accepted online. However, the underwriting process has not been sufficiently automated to allow a credit decision to be made in real time for an applicant who has entered personal data into an application system.
What is needed is a system and method for making real time credit decisions on line. Such a system would be useful for conveniently obtaining a credit card on line. Automation of a process for obtaining a credit report and making an underwriting decision without human intervention would be beneficial because credit approval decisions could be made faster and more cheaply. The true power of such a system would be realized when the system is accessed in the midst of a transaction to obtain credit specifically for the purpose of that transaction.
In addition to providing a system for on line real time approval of credit, it would be useful if a system could be developed that would provide a customized set of offers to each applicant based on data about the applicant obtained from the applicant and the credit bureaus. One important factor in determining the profitability of an account is the average revolving balance maintianed by the account holder. It would be very useful if an offer process could be developed that effectively encourages applicants for credit to transfer balances to a new account.
Ideally, balance transfers should be arranged for the applicant with a minimum amount of effort by the applicant. Presently, applicants are required to fill out a form and provide data relating to their various accounts as well as amounts to transfer. It would be desirable if this process could be simplified for the applicant. It would also be desirable if balance transfers could be designated and confirmed in real time before account terms are verified to an applicant. The ability to control offers to applicants based on credit report data and to require applicants to make balance transfers in real time would enable credit card issuers to have greater control of the risk and profit characteristics of their portfolio of accounts.